Suez Canal NEW

Development Strategy Dr. Hatem Abdelgawad Chief Economist Suez Canal Authority

Outline

Pertaining to the Suez Canal

Suez Canal Vision & Mission

Importance & Advantages of the Suez Canal

Suez Canal Traffic Statistics & World Seaborne trade

Suez Canal Development Axes

Suez Canal New Strategy

Pertaining to the Suez Canal

• The Suez Canal is not just a waterway used for the passage of

ships; rather it is an artery that always has given rise to several

urban communities along its banks.

• It is the meeting point of civilizations and the subject of choice in

case one needs to talk about history.

• The Suez Canal has been playing an invaluable role in servicing

world trade since its inauguration in 1869.

• It provides much needed support to maritime industry through

its non-stop development projects that cope with evolutions in

shipbuilding industry and international maritime shipping.

• The latest of such developments was the New Suez Canal that

was celebrated in August 2015.

Suez Canal Vision

To render an uninterrupted service to vessels that transit the Suez

Canal, with the highest level of security and safety for vessels during

their transit.

To keep the Suez Canal the first choice for shipping companies,

liners, ship owners and ship operators.

To increase the Suez Canal’s share of the world seaborne trade that

uses the Canal.

Suez Canal Mission

To manage and run the Suez Canal in a way that maximizes its

capabilities and position.

To achieve customer satisfaction through continuous improvement

of the entire and all-level operation system.

To improve the Suez Canal performance to cope with the

challenges and opportunities in the international shipping market.

Importance & Advantages of the Suez Canal

• The Suez Canal is the shortest route between East & West compared with other alternative routes.

• The Canal route achieves savings in distance , time, fuel consumption and other related costs.

• Accessibility (no locks) . • Availability (navigation goes day and night) . • Safety & Security . • Liability to be widened and deepened when

required, to cope with the development in ships` sizes and dimensions .

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Importance & Advantages of the Suez Canal

• The Suez Canal share is 8% of the world seaborne trade and 24.5% of the world Container trade.

• The Suez Canal accommodates approximately one billion ton annually (food – medicine – fuel – humane necessities everywhere)

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Savings in distance achieved by Suez Canal compared to alternative routes

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Origin Destination Suez Cape Saving Saving % Suez Cape Saving Saving %

jeddah pariues 1,320 11,207 9,887 88% 4 36 32 88%

Tokyo Rotterdam 11,192 14,507 3,315 23% 29 38 9 23%

Ras tanura Rotterdam 6,436 11,169 4,733 42% 19 33 14 42%

Ras tanura New york 8,281 11,794 3,513 30% 25 35 10 30%

Distance (N.Mile) Time (Days)

Origin Destination Suez Panama Saving Saving % Suez Panama Saving Saving %

Colombo New york 8,600 14,073 5,473 39% 22 37 14 39%

Singapore New york 10,133 12,506 2,373 19% 26 32 5 17%

الوفر فى المسافة بين طريق قناة السويس والطرق البديلة

10 Saving in time up to about 32 days Saving in time up to about 9 days Saving in time up to about 14 days Saving in time up to about 10 days Saving in time up to about 14 days Saving in time up to about 5 days

Development of the Suez Canal Traffic Statistics (2000-2016)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

No 14,142 13,986 13,447 15,667 16,850 18,224 18,664 20,384 21,415 17,228 17,993 17,799 17,225 16,596 17,148 17,483 16,833

0

5,000

10,000

15,000

20,000

25,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

M. Ton 439 456 445 549 621 672 743 848 910 734 846 929 928 915 963 999 974

0

500

1,000

1,500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20152 2016

M. Ton 368 372 369 458 521 571 629 710 723 559 646 692 740 754 822 823 819

0

500

1,000

Numbers

SCNT

Cargo Ton

Suez Canal and world Seaborne trade Suez Canal Share of world

Seaborne trade (%) Seaborne trade via Suez Canal

(M.Ton) World Seaborne trade

(M.Ton) Years

6.9 457.9 6673.1 2003

7.3 521.0 7125.1 2004

7.7 571.1 7433.9 2005

8.1 628.6 7785.2 2006

8.8 710.1 8102.8 2007

8.7 723.0 8317.0 2008

7.0 559.2 7964.8 2009

7.1 646.1 9148.0 2010

7.2 691.8 9554.0 2011

7.4 739.9 9946.0 2012

7.3 754.4 10286.0 2013

7.7 822.3 10637.0 2014

7.6 822.9 10841.0 2015

7.4 819.2 11128.0 2016

Suez Canal Development Axes

Dev

elop

men

t of

the

Suez

Can

al

1. Navigational Channel

2. Marketing policies

3. Navigational Safety Measures

4- Machinery and equipment

5. Human Resources

1. Development of the Navigational Channel

Description Unit 1869 1956 1962 1981 1994 1996 2001 2010 2015

Overall Length km 164 175 175 189.8 189.8 189.8 191.8 193.3 193.3

Doubled Parts km - 27.7 27.7 77 77 77 79 80.5 111.2

Depth m 8 14 15.5 19.5 20.5 21 22.5 24 24

Cross Sectional Area m2 304 1200 1800 3600 4000 4300 4800 5200 5400

Max. Draft feet 22 35 38 53 56 58 62 66 66

Max. tonnage 1000 tons 5 30 60 150 170 185 210 240 240

Suez Canal & Ship Size Capacity

100 % of container fleet 93% of the bulk fleet

63 % of the tanker fleet 100 % of other vessel types

The Suez Canal can accommodate the following percentages of fully loaded vessels in the global fleet:

In addition, the canal can accommodate all ballast vessels and VLCCs & ULCCs in partially loaded condition

2. Development of Marketing Polices

The philosophy of SC tolls is based on: • Comparing the ship cost through the SC route with alternative

routes. • Sharing part of the savings achieved by the transiting vessel. • Giving due consideration to market condition and economic

variants. • Considering the vessel type and size, loading condition and

cargo type.

The canal tolls are annually revised to make sure they are in line with the prevailing market conditions of maritime transport

Flexible Pricing Policies

SCA adopted a flexible marketing policies so as to encourage vessels to use the Suez Canal route, such as:

Long Haul Rebate System.

Tolls Permanent Reductions.

Cargo Incentive Rebate Policy.

Co-operation with SUMED pipeline.

Time Saving Service.

3. Developing Navigational Safety Measures

A- Vessel Traffic Management System ( VTMS )

Monitoring all the vessels transiting the canal through a radar net work

covering all the canal.

B – The Maritime Training & Simulation Centre

Training SCA and ship-lines pilots on the main maneuvers for transiting the

canal safely under different environmental conditions using up to dated

maritime simulation technologies.

The SCA spares no effort to ensure a safe and secure passage for all transiting

vessels for the prosperity of world trade and all nations.

4. Development of machinery and equipment

Developing of dredger’s fleet. In 1956 the Suez canal authority had 3 dredgers with capacity of 17.7 thousand hp.

And now it has a huge fleet of dredgers about 12 dredgers of different models and sizes

with a total capacity of 156 thousand hp.

Developing of tugs fleet . SCA currently has 86 Tugs including 37 Tugs with a total capacity of 1.6 million hp ,

and pollard pull ranges from 16 to 160 tons .

Developing of the shipyards. Includes: - Development of floating docks. - Development of floating cranes.

- Development of Machinery and Equipment.

- Cutter Suction dredger 31050 hp - Year of built 1996 - Max. dredging depth 35 m

MASHOUR

Trailing Suction Hopper dredger - Hopper capacity 10000 m3 -Total power 25032 hp - Year of built 2004 - Max. dredging depth 35 m

Mecca

Year of built 1993 engine power 4 × 4000 hp speed 17 knot Pollard pull 160 tons

Ezzat Adel

Length : 30.2 m draught: 5.8 m Speed: 13.6 knot Engine: 5400 hp Pollard pull 70 tons

Mosaed 2 Length : 30.2 m draught: 5.8 m Speed: 13.6 knot Engine: 5400 hp Pollard pull 70 tons

Mosaed 3

Port Said shiyard

5. Human Resource Development

• The SCA pays much attention to human resources. This is

quite clear in its employment policy which aims at raising

efficiency and skills of its personnel.

• Realizing that this is the asset through which the SCA can

render services that meet the customers needs, the SCA is

quiet proud of this workforce.

Suez Canal New Strategy

The Suez Canal Authority is currently taking a new Strategy to provide

high quality services for its Customer includes:

1. Mega projects for waterway of Suez Canal

2. Promoting Suez Canal Affiliated companies

3. Suez Canal Area Development Project (SCZone)

4. Customer Orientation.

Suez Canal has recently completed two Mega projects:

A- The New Suez Canal

B- East Port Said Channel (opened in 24th Feb. 2016)

1- Mega projects for waterway of Suez Canal

In order to cope with the

developments in the Suez Canal Area

SCA had to think about the future of

the Suez Canal as a waterway, in

light of the world trade growth, world

fleet and the pressing need to boost

the national economy of Egypt. This

was the main reason behind the idea

of the New Suez Canal project.

A- The New Suez Canal

The New Suez Canal is the name of a new waterway project expanding the existing SC.

The New SC is 72 km long this involves 35 km of dry digging from km 60 to km 95, and 37 km of deepening and widening the Canal by-passes in the Great Bitter Lakes and Ballah Area .

The enlarged canal allow ships to sail in both directions at the same time over much of the canal's length. This is to decrease waiting time for most ships, and to double the capacity of the SC .

New Suez Canal

North Bound Convoy

South Bound Convoy

The New Suez Canal was celebrated in August 2015, and that surely will save more time, provide more safety for transiting vessels, and increase the capacity of the Suez Canal .

The enlarged Canal will allow ships to sail in both directions at the same time over much of the canal's length.

Objectives of the Project

Boosting the hard currency earnings of Egypt

Increasing the doubled parts of the waterway to 50%

Making the Suez Canal more attractive to users

Increasing the numerical capacity of the waterway to 97 ships/day in 2023 up from 49 ships/day, to cope with the expected growth of world trade

Provide support to the Suez Canal Area Development Project, and contribute in boosting the Egyptian economy through turning Egypt into an international logistics and commercial center

Minimize the cost for transiting vessels, thus attract a bigger number of ships to use the Canal

Time frame for the implementation of the Project is 36 months, as per the relevant technical estimation; however, the President has requested that the implementation period be reduced to one year. Coordination has made with the Engineering Authority of the Armed Forces to set a new implementation plan in cooperation with the SCA

Time Frame for the Implementation

Funding for New Suez Canal Project

Expected Funding Sources

Popular subscription

Government funds

Local investors and businessmen

National banks

B- East Port Said Channel

Side Channel

Vessels heading to East Port Said Port

Vessels heading to Suez Canal • It is a separate channel

that allows access to the

port from the north.

• It adds to the efficiency

of the port as it will

provide a service for the

ships outside the convoy

system as regulated by

the Suez Canal Authority.

2- Promoting Suez Canal Affiliated Companies

The chairman of the Suez Canal Authority announced that 2016 was (SCA affiliated companies year) , there is a plan to study the current situations of these companies in order to develop them and increase their income, considering their social responsibility as well.

Suez Canal Authority and its affiliated companies can take advantage of the Vessels waiting at the waiting area at the entrance of the Canal to establish some of the value added services to serve and get benefit of the trade passing through the Canal .

Bunkering

Supply ships with water and food

Towage

Salvage

Ship building

Ship repair and maintenance

Container maintenance

Reefer Ships

Ship scrapping

Stevedoring

Warehousing

Logistics activities

The proposed activities for optimization of the potential of the Suez Canal Authority and its affiliated companies

Suez Canal Authority is planning to establish new set of value added Maritime

services for the diversification of Suez Canal business as :

3- SUEZ CANAL AREA DEVELOPMENT PROJECT (SCZone)

Located around the main international maritime route where almost 8% of the international trade pass through (over 17,000 ships passing through each year).

Suez Canal & SCZone

• The SCZone is one of the mega developments launched to stimulate economic development and growth in Egypt.

• It seeks to transform the area into a world-class logistics and industrial hub that serves global and domestic markets.

• Over 13,000 hectares of land have been made available across 3 sites: Port Said, Qantara (Ismailia) and Suez.

• Opportunities for investment across all sectors and particularly: Ports & Logistics, Manufacturing, Maritime-related services, ICT and Energy

• Target is to create 1 million additional jobs over the next 15 years.

SCZone Objectives

Why SCZone?

• A strategic location – at the heart of international trade and connected to the domestic, regional and global markets

• Opportunities across several economic sectors such as ports, logistics, and manufacturing but as an integrated project.

• A large and available workforce • High quality infrastructure and connectivity • A true One Stop Shop at the service of investors, helping

to reduce the time, and cost, of setting up businesses. • Investment incentives

South East Asia MENA

Europe

Africa

US East Coast

Competitive Global Location

Providing investors with a strategic location that offers competitive production costs and most comprehensive market access programs in the MENA region.

Main Ports

Primary shipping routs

Secondary shipping routs

Major areas of shipping activity

Suez Canal

Egypt

Competitive Global Location

A strategic global location at most comprehensive market access in the major area of shipping activities.

Preferential Market Access

Access to USA , Europe, Middle East and Africa Accessing +1.8 billion Customers through multi-trade agreements

CAIRO

Alexandria

Luxor

Damietta

Giza

Qena

Asyut

SCZONE

Strategic Domestic Site

3 Major Cities

Port Said

Ismailia

Suez

East Port Said

Ain Sokhna

4 industrial zones

West Qantara

Silicon Valley

6 ports

West Port Said East Port Said Al Aresh Port

Ain Sokhna Port

Al-Tor Port

Adabyia Port

Opportunities across all sectors – and particularly:

Port & Logistics

Maritime-related Services

Manufacturing

ICT

Energy

Creation of 1 million new jobs over the next 15 years

REGIONAL DEVELOPMENT STRATEGY

Potential Economic Sectors

(1) Ports and Logistics

Ports are a key catalyst for logistics and maritime related activities in the project area.

Maximizing advantages presented by the Suez Canal

Transport infrastructure key to increasing connectivity

Three Logistics Hubs:

(i) East Port Said;

(ii) Ain Sokhna;

(iii) Ismailia (close to the Free Zone).

Specific Logistics Opportunities

Port Said East Port logistics zone centrally located between existing port and proposed port and Industrial zone.

Ain Sokhna located between container terminals & Industrial Zone

Both are designed to be fully integrated with intermodal components.

Taking the best of modern thinking to ensure integration between shipping, port and land logistics that effectively combine transport modes and create efficient port centric solution.

(2) Maritime-related Services

(3) Manufacturing

Targeted Industrial Sectors

A series of Industry Handouts including some of the following:

Automobile Assembly and Components

Chemicals/Petrochemicals and Oil Refining

Pharmaceuticals

Agribusiness

Domestic Appliances and Consumer Electronics

Materials for Building and Construction

Textiles and Ready-Made Garments (RMG)

Manufacturing Additional Sectors

Additional Sectors

Additional sectors were highlighted which exhibited positive characteristics and indications of potential for future growth and development under the head of general manufacturing. These include:

– Furniture – Lighting – Miscellaneous manufactured goods – Medical equipment – Tools

(4) ICT

ICT strategy Pillars

4- Customer Orientation

The Suez Canal Authority is currently taking a Strategy based on

Customer Orientation.

This strategy is applied through networking, meetings with customers, and

exchange of views for mutual benefits.

Thanks The SCA spares no effort for the sake of ensuring a safe and secure service for all transiting vessels.

w w w. s u e z c a n a l . g o v. e g

Last but not Least